Report: Vacancies in Twin Cities real estate market slowed in 2010by Annie Baxter, Minnesota Public Radio
St. Paul, Minn. — The Twin Cities commercial real estate market may have hit bottom in 2010, according to report published twice a year by Bloomington-based NorthMarq, a commercial real estate services firm.
While vacancy rates in the Twin Cities commercial real estate market continued to worsen last year, the pace of deterioration slowed somewhat.
NorthMarq issues its report twice a year. The latest findings show that overall market vacancy increased only half a percent between 2009 and 2010, after climbing more than 3 percent between 2008 and 2009.
Bill Rothstein, a senior vice president with Northmarq, said the office space market was one of the strongest performing segments in the second half of the year.
"Now, it's still very challenging with vacancy rates at 20 percent plus," Rothstein said. "But the vacancy rate has now leveled off; we believe it has hit the bottom."
Rothstein said the office market picked up because business owners are becoming more comfortable with the general economy.
"They were frightened the last two years because it was so unstable -- they didn't know how far it could fall," he said. "Now that we've kind of leveled off, people kind of understand where we're headed, and things are improving, they're more comfortable in making leasing decisions."
Rothstein said 10 percent would be a stable vacancy rate. He notes that current vacancy rates in the various commercial segments are still among the highest experienced in the Twin Cities in 20 years.